Despite Economic Downturn, Luxury Market 'Blazing'... High-End Luxury Goods Consumption More Than Doubled in 3 Years

Number of Taxed Cases for Jewelry and Watches Steadily Increasing Every Year
Assemblyman Han Byung-do: "We Must Ensure No Tax Blind Spots"
Be Cautious of Online Transactions Such as Overseas Shopping Malls Selling Counterfeit Goods

Despite the economic downturn, consumption of high-end luxury goods such as jewelry, watches, and bags has more than doubled over the past three years.

According to data submitted by the Ministry of Economy and Finance to Han Byung-do, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, the number of taxable cases for high-end luxury goods such as jewelry, precious metals, and luxury watches has steadily increased every year over the past four years (2019?2022). The number of taxable cases surged from 29,054 in 2019 to 35,974 in 2020, 50,299 in 2021, and 58,386 in 2022.

Despite the economic recession, consumption of high-end luxury goods such as jewelry, watches, and bags has more than doubled in the past three years. The photo is not related to the specific content of the article. [Photo by Yonhap News]

Under the current Individual Consumption Tax Act, a 20% tax rate is applied to the amount exceeding the standard price for each luxury item. As consumption increased, the tax amount imposed also rose from 136.2 billion KRW in 2019 to 145.2 billion KRW in 2020, 207.5 billion KRW in 2021, and 283.4 billion KRW in 2022, marking a 108% increase over three years.

By item, the number of taxable cases for luxury bags surged by 22,457 cases (145%) from 15,539 in 2019 to 37,996 in 2022, and the tax amount also significantly increased from 18.6 billion KRW to 59.3 billion KRW. Luxury watches (7,690 cases, 74.6 billion KRW in 2019 → 9,967 cases, 129.2 billion KRW in 2022), jewelry and precious metals (2,569 cases, 34.3 billion KRW → 4,842 cases, 78.8 billion KRW), and luxury furniture (2,128 cases, 5.9 billion KRW → 3,683 cases, 12.1 billion KRW) also saw substantial increases.

Assemblyman Han Byung-do stated, "While luxury consumption is becoming widespread recently, transactions through online platforms are also becoming active," and emphasized, "The Ministry of Economy and Finance and the National Tax Service must conduct thorough monitoring and improve the system to prevent any tax blind spots."
[Photo by Yonhap News]

Assemblyman Han Byung-do emphasized, "While luxury consumption is becoming more common, transactions through online platforms are also becoming more active. The Ministry of Economy and Finance and the National Tax Service must conduct meticulous monitoring and improve systems to prevent tax blind spots."

Meanwhile, as luxury consumption through online platforms grows, consumer damages related to counterfeit purchases from overseas direct purchase shopping malls continue unabated. Since it is difficult to resolve issues through damage relief procedures or civil lawsuits with overseas shopping malls, extra caution is required.

Above all, consumers should be aware that paying based solely on internet advertisements or purchase reviews claiming to sell famous brand products at low prices can easily lead to damages. When encountering an overseas shopping mall for the first time, it is necessary to carefully check for related damage cases using international transaction consumer portals and internet search portals.

This content was produced with the assistance of AI translation services.